Council OK's city attorney request to audit Phoenix

The Carmi City Council heard a request from its city attorney to ask the state to conduct an audit on The Phoenix Foundation and Phoenix Rehabilitation and Nursing Center and their governing boards and supervisors.

The Carmi City Council heard a request from its city attorney to ask the state to conduct an audit on The Phoenix Foundation and Phoenix Rehabilitation and Nursing Center and their governing boards and supervisors.

Greg Stewart, Carmi's city attorney, reported to the council at its regular meeting Monday evening he still had not received any of the information he has been requesting from the entity of Phoenix, combining the nursing center and the board responsible for opening a hospital and emergency room.

Stewart asked the council for authorization to ask the state to conduct an audit on the facility and its separate entities after he had failed to receive any requested information from the entities for the last few years.

Stewart told the council he had finally received a phone call from an unidentified board member at 4:15 Monday evening disclosing that Phoenix had hired a CPA firm to conduct its own internal audit for 2013 and year-to-date 2014.

However, Stewart pointed out, Phoenix (as a whole, be it the nursing home, the foundation, or its two boards) have failed to comply with his repeated requests, dating back now for a period of years, to send him requests for a daily log concerning its expenses and revenues.

Phoenix is indebted to the city now in terms of failing to repay its revolving loan and utility bills, and has been for an extended period of time. Lil Fortner, chief administrator for Phoenix, has been on the hot seat at a number of council meetings and has failed, repeatedly, to provide the city with requested information.

She has blamed Phoenix's financial shortcomings on the State of Illinois' failure to reimburse them for bills owed, including Medicaid payments due, totaling some $1.77 million. Fortner produced a letter at a previous council meeting (received by her via fax) from the state, indicating the state's willingness to reimburse Phoenix.

Stewart told the council Monday evening that he (finally) received a phone call at 4:15 p.m. Monday from a Phoenix board member, though it wasn't clear at the council meeting if it was the board from Phoenix Foundation or the nursing and rehab center.

The caller related to Stewart that Phoenix had hired a private CPA firm to audit Phoenix's books for 2013 and 2014 year-to-date.

Stewart reported the caller told him, as pointed out at previous council meetings by council members when Fortner asserted the state "check" would cover existing debts, that the funds from the state to Phoenix were already being withheld by various entities, including $289,000 by the Internal Revenue Service and another amount to be withheld by the state for bed taxes owed and other indebtedness.

A private contractor that provided services or materials to Phoenix has also filed paperwork with the courts to place a lien on any money received by Phoenix after that company was the plaintiff in a civil suit to recoup monies owed by Phoenix. Phoenix owes that company about $300,000.

Page 2 of 2 - Stewart said there may be other creditors out there that are also owed by Phoenix.

Stewart said one way the city may be able to force Phoenix to turn over its financial records for the entire period of time of its existence could be to ask the state to conduct a full audit. Since Phoenix has received state funds to operate, the state is entitled to conduct such an audit, though Stewart said he did not know how long it would take or if the state would even do it.

He asked the council for permission to place a call to the appropriate person to get the ball rolling on having the state do such an audit.

He was adamant in pointing out that the city's intent is not to scare anyone away from Phoenix, though he has heard their census is dropping. The intent of the audit is to help the council better understand if a hospital/emergency room is even feasible in White County. If so, the council could take steps toward helping Phoenix through its rough times from a better informed viewpoint.

He also cautioned that it is "not my purpose, not my desire" to force further declines in census numbers at Phoenix. "It's a legal issue, we make a demand...they haven't followed through ... they've hit hard times."

Phoenix currently owes the city about $500,000 in loan repayments and unpaid utility bills.